FINANCIAL DISTRESS AND PROFITABILITY OF TIER THREE COMMERCIAL BANKS IN KENYA
DOI:
https://doi.org/10.47672/ajf.339Keywords:
Financial Distress, Tier, Profitability, Liquidity, Nonperforming loans, Leverage, Return on Assets, Total loans.Abstract
Purpose: This study is aimed at analysing the effect of financial distress on the profitability of tier three commercial banks in Kenya.
Methodology: Financial distress was proxied using non-performing loans, leverage and liquidity. Profitability was indicated using return on assets ratio. The study sampled twenty commercial banks and used casual research design. The study estimated a multiple regression linear model.
Results: The study established that non-performing loans have a negative and statistically significant effect, Leverage had a positive and statistically significant effect while Liquidity had a positive and statistically insignificant effect on the profitability of tier three commercial banks in Kenya.
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Copyright (c) 2018 Caroline M. Kimathi, Dr. John Mungai
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